10. Net Income Per Share

Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include outstanding stock options and unvested restricted stock awards, which are reflected in diluted net income per share by application of the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of stock-based compensation cost for future services that the Company has not yet recognized, and the amount of tax benefit that would be recorded in additional paid-in capital upon exercise are assumed to be used to repurchase shares.

Net income per share for the three and six months ended July 3, 2011 and June 27, 2010 are as follows (in thousands, except per share data):


	Three Months Ended				Six Months Ended
	July 3, 2011		June 27, 2010		July 3, 2011		June 27, 2010
Net income	$	20,597	$	10,465	$	41,786	$	24,192

Weighted average shares outstanding:
Basic		37,017		35,237		36,712		35,095
Dilutive potential common shares		951		706		968		748

Total diluted		37,968		35,943		37,680		35,843

Basic net income per share	$	0.56	$	0.30	$	1.14	$	0.69

Diluted net income per share	$	0.54	$	0.29	$	1.11	$	0.67

Weighted average stock options and unvested restricted stock awards to purchase 1,551,457 and 1,659,322 shares of the Company's stock for the three and six months ended July 3, 2011, respectively, and 2,691,532 and 2,792,612 shares for the three and six months ended June 27, 2010, respectively, were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive.